Discount Mortgage All mortgage lenders have a standard variable rate or SVR, which is the normal interest rate that they charge people who borrow money from them. You can sometimes get a discount off this rate, which means that you’ll pay a set percentage below the SVR. Discounted rates are usually only for a set […]
Discount Mortgage
All mortgage lenders have a standard variable rate or SVR, which is the normal interest rate that they charge people who borrow money from them. You can sometimes get a discount off this rate, which means that you’ll pay a set percentage below the SVR.
Discounted rates are usually only for a set period of time, typically between two and five years. You’ll have to pay a fee if you want to get out of the deal before that time is up. So, the lender is rewarding you for staying with them for the lifetime of the deal, by charging you slightly less each month.
Your payment might still go up if the SVR rises but you’ll still be paying a lower rate of interest.
Once the deal ends, you go onto the lender’s SVR– or you can look for another discounted deal, of course.
Capped Mortgage
If you’re living on a strict budget, a capped mortgage could help to keep your mortgage payments affordable.
With a capped mortgage you’ll have the security of knowing that your payments won’t go above a certain level. This is because the interest rate you pay is ‘capped’.
How much you pay could still go up if the SVR rises, so you need to check that you can afford any increases up to the cap.
Capped rates can be more expensive than some other mortgage types to start with. This is because you’re paying for the security that the cap provides.
A capped rate will apply for a limited time – anything from two to five years.
Fixed rate
All lenders have a standard rate of interest that they charge people who borrow money from them. Because it can change from time to time, it’s called the Standard Variable Rate, or SVR. If the interest rate goes up, you’ll pay more. If it goes down, you’ll pay less.
With a fixed-rate mortgage, your interest rate stays the same for a set period. So that means that your monthly mortgage repayments will remain the same, even if interest rates rise. The disadvantage is that if interest rates fall, your mortgage won’t become any cheaper.
You can typically fix your interest rates for anything from two to ten years. You’ll know how much you have to budget each month for your mortgage, and you’ll have peace of mind that your repayments won’t change for the duration of the fixed term.
As with other mortgage deals, once a fixed rate ends, you’ll be moved onto your lender’s SVR. This often means that you’ll pay more, but there’s nothing stopping you from looking for another deal – and we can help you to find one that meets your needs.
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
